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Disney (DIS) - a growth stock? |
HenryTo
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 Posted: Thu Feb 24, 2005 12:27 am Post subject: Disney (DIS) - a growth stock? |
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From the Motley Fool: http://www.fool.com/News/mft/2005/mft05010319.htm
Disney's Global Magic
By Steven Mallas
January 3, 2005
It's a new year. Aside from the ritual of making resolutions, a fresh calendar ushers in a hopeful spirit for better times. I, for one, am optimistic that 2005 will be a better year for one of my holdings, Disney (NYSE: DIS).
In particular, I'm keeping my fingers crossed that a new global marketing initiative that the company announced last week will spur the theme-park operating segment. You can read all the details in the supplied link, but I'll go over some highlights.
The powers that be at the Magic Kingdom are tagging one part of the campaign with the evocative phrase "Happiest Celebration on Earth" (remember, we're talking global here, not just in Florida and California). The celebration marks the 50th anniversary of Disneyland's opening. Another advertising spot is christened "Coming Home"; the objective here is to get people who've been to the parks at one or more points in their lives to come back and relive some nostalgic moments… while spending a bunch of discretionary capital, of course.
I want this campaign to succeed and bring in as many park patrons as possible. Besides television networks such as ABC and Viacom's (NYSE: VIA) CBS, high-profile Internet destinations including Yahoo! (Nasdaq: YHOO), Microsoft's (Nasdaq: MSFT) MSN, and Google (Nasdaq: GOOG) will help spread the pixie dust.
Of particular interest to me was the mention of the opening of the new theme park, Hong Kong Disneyland. It's good to see that the developing investment is being given an opportunity to bear some fruit, although it won't open till September. As longtime Disney observer Rick Munarriz stated in an analysis of the last earnings report, the stock seems to be headed for a rebound. I read with slack-jawed marvel when he rhetorically inquired, "Is Disney the next great growth stock?" It then occurred to me that Disney's share price was slowly but steadily creeping back to my personal cost basis on the stock. And let me tell you, it took a lot of averaging buys to get me back to this point, as I had the bad luck to initiate my position back in summer of 1998.
Disney's stock might be heading in an upward trajectory, but it could just as easily falter; I've been through transient run-ups before. This time feels different, though. We have the global campaign and the anniversary asset (anniversaries are always great marketing tools), as well as the new Hong Kong destination, but I'm also looking for the divestiture of the Disney retail chain and its subsequent conversion to a royalty model to pay nice dividends in the coming year. Perhaps consumer products will finally add some real value to the bottom line.
I'm a long-term investor in Disney, so I'm willing to wait this one out for years. It's been rough going, but now that the dividend has finally been raised after remaining in a steady state for too many years, the new year might indeed be kind to the Mouse and its stakeholder charges.
More information on recent events concerning the Walt Disney conglomerate:
A Disney Year
The Mouse Cleans House
Disney's Brilliant Hike
Fool contributor Steven Mallas owns shares of Disney |
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HenryTo
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| Posted: Wed May 09, 2012 2:23 pm Post subject: |
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Morningstar on DIS' fiscal 2Q earnings.
| Quote: | | Walt Disney DIS reported impressive fiscal second-quarter results, with its cable networks and branded businesses demonstrating their pricing power. Our $50 fair value estimate is unchanged, and we think there is still a bit more upside in the shares. A fair deal of optimism is priced into the shares today, but as shown as recently as last summer, when the shares got as low as $31, one earnings hiccup or macroeconomic head fake could give patient investors a better buying opportunity for this wide-moat company. We remain pleased with the company returning capital to shareholders via stock buybacks. Over the past six months, Disney has repurchased 51 million shares (about 3% of shares outstanding) at an average price just north of $37. Revenue and earnings per share were up 6% and 18%, respectively. Cable network sales improved 12% (9% after adjusting for deferred affiliate revenue) thanks to growth at ESPN and the worldwide Disney Channels, which are now in more than 167 global markets, up from 19 a decade ago. We think Disney Channels is an underappreciated asset, given the international growth runway and ability to promote the Disney brand to all corners of the world. Advertising growth at ESPN was 6% higher after excluding the benefit of two extra bowl games and NBA games in the quarter. On a trailing-12-month basis, cable network operating margins matched its recent high of last quarter at 41.4%. We view the increase in sports rights fees, especially for NFL and college football, as manageable and believe the cable networks can maintain margins in excess of 40% over the next five years. The parks and resorts business was the standout performer in the quarter, with sales up 10.2% (11.0% domestic and 6.6% international). Attendance at domestic parks increased 7% with 5% higher per capita spending as Disney continues to gradually flex its pricing power post-recession. We think the parks trends should continue, especially in light of the improvements occurring in Orlando and Anaheim. We view the current peak capital expenditures as necessary costs that will come down after this year and help improve free cash flow for Disney. The recent success of The Avengers at the global box office validates our thesis that Disney's brands are as strong as ever. A sequel to The Avengers is in the works, and sequels are already slated for several of the hit characters in movie. In fact, demand for the brand is so strong that Disney alluded to shortages of some of its licensed toy products in some retail channels outside Disney's control. Relative to the higher-margin cable network business, the branded half of Disney is more capital-intensive and requires acquisitions like Marvel. However, we view the wide moat on the Disney brand lasting for well more than two decades into the future. |
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HenryTo
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| Posted: Wed Feb 08, 2012 4:16 pm Post subject: |
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Morningstar on DIS' fiscal 1Q earnings.
| Quote: | | Walt Disney DIS reported strong fiscal first-quarter results, with the cable networks and parks showing off their pricing power. The stock has been on a strong run recently, but we still think it is slightly undervalued relative to our $45 fair value estimate. Excluding the inherently lumpy film studio, overall sales and operating profit increased 4.3% and 11%, respectively. Cable network revenue improved 8% thanks to growth at ESPN and the worldwide Disney Channels, which are now in more than 100 global markets, up from 19 a decade ago. We estimate that advertising growth at ESPN was 8% higher after adjusting for two fewer major college bowl games and fewer NBA games in the quarter. ESPN has a dominant position in live sports, and the cable networks remain the key growth driver for Disney. On a trailing-12-month basis, cable network operating margins improved to a recent high of 41.4%. We view the increase in sports rights fees, especially for the NFL and college football, as manageable and believe the cable networks can maintain their current profitability of around 40% over the next five years. In early January, Disney and Comcast CMCSA announced a sprawling new long-term agreement that covers 70 Disney services, highlighted by ESPN, Disney Channel, and the launch of Disney Junior on Comcast. The agreement will allow Comcast customers to access a broad range of Disney networks on an authenticated basis. It is our understanding that Comcast's deal for rights to the ESPN family of networks did not expire until 2014, so including these expensive rights in the new long-term agreement highlights the importance of live sports and ability of ESPN to pass the rising costs of sports rights through to distributors. The parks and resorts continue to exhibit pricing power, as revenue growth of 10% was driven by higher per capita spending and attendance. Disney was able to generate some operating leverage off the strong growth, with segment profit margins up 120 basis points to 17.5% from 16.3% in the year-ago quarter. Looking ahead, management said hotel bookings at the parks were pacing up a mid-single-digit percentage. Management now expects total capital expenditures in fiscal 2012 to increase by several hundred million, which implies a number a bit shy of our $4 billion estimate, based on the new cruise ship, revamping portions of domestic parks, and the beginning of investment in the China Disney property. We realize some investors continue to be disappointed by the high level of capital expenditures for the parks, but we view most of this spending as necessary investment in a long-lived asset. We think investors should look past the current level of spending, as we expect it to start moderating after 2012. |
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rffrydr
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| Posted: Wed Feb 08, 2012 8:14 am Post subject: |
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It's a sad day to see Disney retreating into it tentpoles. This will work for a year or two--or just long enought for them to forget what it is they actually do!
Stock quotes in this article: dis, twx
| Quote: | Disney's (DIS) made a decision, a decision that is so wise that it's a real show stopper. It's not just going to waste a lot of money pumping out movies that generate a lot of sales but no profits.
Today there's a ton of hand wringing about how Disney beat the bottom line but missed the top line and therefore should be sold.
You might want to sell Disney because it's had a nice run or because you don't want to pay a premium to the market -- 15x earnings -- for its 13% growth rate. You might say it has gone up 10% already this year and I want to find something that hasn't moved up that much yet. Time Warner (TWX), for instance, with a similar growth rate and a slightly lower P/E is only up 5% this year and has a 2.4% yield, vs. Disney's 1.4% yield.
But I sure as heck wouldn't sell it because of the revenue miss. Disney's made a conscious decision not to chase revenues. They are making fewer, better films, taking on less risk and making more money per film. They are rationalizing the entertainment business. For a company with such consistent and marvelous growth away from film, notably the theme parks and the incredible ESPN juggernaut, why roll the dice on a whole bunch of films that may or may not make it?
Other film studios may have to take that risk, but Disney, with its bankable movie franchises like "Pirates," "Toy Story" and now Marvel characters, doesn't need to constantly reinvent the wheel. You have to consider these movies as if there are gigantic products, like Tide or Crest, and sometimes it's cheaper and more lucrative to do line extensions than to keep trying to invent new categories or one-off movies that bomb. |
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HenryTo
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HenryTo
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| Posted: Wed Aug 10, 2011 11:59 am Post subject: |
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Morningstar on DIS' fiscal 3Q earnings:
| Quote: | | Walt Disney DIS reported solid fiscal third-quarter results, with major contributions from the cable networks and improved pricing at the parks and resorts. Our $44 fair value estimate is unchanged, and the shares have become much more attractive over the past few weeks. Overall sales were 7% higher as the cable networks and theme parks offset a small decline in filmed entertainment. The company is on track to reach our 7.5% sales growth forecast for fiscal 2011. Operating margins of 23.5% were essentially flat as increased investment at the parks constrained the operating leverage that would usually occur along with 12% sales growth from the segment. Cable network revenue improved 7%, with higher affiliate fee and advertising revenue despite having a tough comparison with a few large live events in the year-ago quarter. Advertising revenue growth was 9% on a comparable basis. We continue to think ESPN has a dominant position in live sports and remains the key growth driver for Disney. Revenue growth of 12% at parks and resorts was driven by higher pricing, with domestic attendance 2% higher and per capita spending up 8%. Hotel attendance was 1% lower but per room guest spending was 14% higher. The segment operating margin was flat because of lower royalty revenue from Japan and some investments for future growth such as upgrades at California Adventure, Fantasyland in Orlando, and initial Shanghai costs. We view these expenses as well as higher capital expenditures as necessary to enhance long-term growth for this segment. Looking ahead, the most cyclical part of Disney's business is the parks and resorts. Management has not seen any falloff in demand at the parks over the past few weeks as a result of the shaky capital markets and recent weak economic news. We're not surprised, given the late-cycle nature of the parks business in which bookings occur several quarters in advance. The company indicated that room reservations were pacing down 2% for the September quarter, which is on par with the outlook given for the June quarter during the May earnings call. |
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HenryTo
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| Posted: Wed May 11, 2011 11:48 am Post subject: |
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Morningstar on DIS' 2Q earnings:
| Quote: | | Walt Disney DIS reported a solid fiscal second quarter, with strong results from ESPN offsetting a few one-time charges and timing issues that affected quarterly earnings per share. We're maintaining our $44 fair value estimate. Overall sales were 6% higher as the cable networks and theme parks offset declines in filmed entertainment results. We believe the company is on track to reach our 8% sales forecast for fiscal 2011. Seasonally low operating margins of 17% were essentially flat with the year-ago quarter as lower filmed entertainment profit offset gains at the cable networks. Cable networks revenue grew 17% and as advertising at ESPN remained robust. When stripping out the three additional BCS college bowl games, ad revenue increased 23% from the year-ago quarter. In addition to strong demand for advertising across the television industry, we think the strong result highlights the value of live sports in today's landscape of time-shifted viewing. Revenue growth of 7% at parks and resorts was a function of Disney weaning consumers off discounts. Adjusting for the Easter holiday, attendance was 2% higher and per capita guest spending was up 6%. Additionally, domestic hotel pacing for the current quarter showed 2% lower occupancy, but a double-digit increase in pricing. We think these results once again validate our view that the company did a great job of managing this fixed-cost business through the downturn as it balanced attendance while maintaining the ability to raise prices again in the future. A few negatives in the quarter were the weak filmed entertainment results and continued losses in the interactive segment. Movie sales declined 13%, driven by tough home video comparisons and a bomb at the box office, Mars Needs Moms. We view this as a minor setback and expect better results over the next few quarters as a result of several hit releases, including the much anticipated Cars 2. The interactive segment generated an operating loss of $115 million, worse than the $55 million loss a year ago. This segment has been a constant money-loser, as several of its initiatives, including video games, have not panned out. We view this business as the company's main vice, but given its small size, we choose to look past the poor results and focus on the great cable networks and parks businesses. We think the stock is slightly undervalued at about 17 times our 2011 earnings per share estimate. |
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rffrydr
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| Posted: Thu Feb 10, 2011 3:31 am Post subject: |
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The market moved Disney's "uncertainty rating" to non-existent. Lifetime highs.
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HenryTo
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| Posted: Thu Feb 10, 2011 1:25 am Post subject: |
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Morningstar on DIS' 1Q earnings:
| Quote: | | Walt Disney DIS reported strong fiscal first-quarter results, with its key businesses firing on all cylinders. We plan to increase our fair value estimate in recognition of the strong results as well our more optimistic outlook for long-term profitability. Overall sales improved 10% from the year-ago quarter, highlighted by the media networks and parks and resorts. The strong revenue growth also boosted overall operating margins to 19.3% versus 14.7% in the prior period. Higher media network revenue was fueled by cable network growth of 16%, with broadcasting only up 3%. The cable network results were driven by affiliate fee growth of 9% and 27% ad revenue growth at ESPN, boosted by both improved audience ratings and ad pricing. We believe these results demonstrat e the power of live sports programming at a time when time-shifted viewing continues to proliferate. Revenue growth of 8% at parks and resorts provided evidence that Disney is slowly weaning customers off discounts. Domestic attendance was 2% higher with an 8% jump in per capita spending. Management indicated that domestic room reservations are pacing up 3% next quarter despite the unfavorable shift of the Easter holiday. We were impressed by the strong 24% growth in consumer product revenue, driven by the Marvel acquisition and Toy Story 3 merchandise. This is an example of Disney's ability to monetize brands across different business units. In addition to increasing our fair value estimate, we plan to move our uncertainty rating to medium from low to align Disney?s uncertainty rating with other media conglomerates like Time Warner TWX and News Corporation NWSA. We believe medium uncertainty is more appropriate given Disney's exposure to economically sensitive revenue streams like advertising and travel. |
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HenryTo
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| Posted: Fri Nov 12, 2010 11:23 pm Post subject: |
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Morningstar on DIS' 4Q results:
| Quote: | | The negative initial headlines on Walt Disney's DIS fiscal fourth quarter seem misguided, as the results were lower because of one-time items--in the same manner that results from the third quarter were a bit inflated. We're maintaining our fair value estimate, as results were generally in line with our expectations. Trading at 16 times our fiscal 2011 earnings per share estimate, the shares accurately reflect Disney's growth potential, in our opinion. Overall sales fell 1% in the fourth quarter after a 16% increase in the third quarter; to put the results in perspective, sales in the second half of fiscal 2010 were up 7% versus the prior period. For the full fiscal year, operating margins came in about as expected at 17.3%, up from 15.3% a year ago. We expect margins to approach 19% over the next several years. Cable network revenue was down 6% mainly because of the timing of revenue recognition for affiliate fees and the extra week in the year-ago quarter. ESPN recognizes affiliate fee revenue as it hits certain live sports programming milestones, and this year the June quarter pulled revenue forward. Cable network sales increased 9% in second half of this fiscal year, so the business remains healthy. ESPN advertising growth increased 19% in the quarter, driven by higher ad pricing. We continue to view ESPN as a dominant property and key growth driver for the company. At Disney's parks and resorts, the 1% revenue decline was affected by the extra week in the year-ago quarter. Adjusted for the extra week, attendance was 1% higher, with per capita spending up 6%. Disney is sticking with its strategy of gradually weaning consumers off discounts at its properties. Domestic room reservations for the current quarter are pacing up 5%, higher than the guidance over the past several quarters. Filmed entertainment sales improved 6% thanks to the strong performance of Toy Story 3 in international theaters, and consumer product sales increased 13%, helped by the strength of Toy Story- and Marvel-related merchandise. |
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HenryTo
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| Posted: Wed Aug 11, 2010 11:25 am Post subject: |
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Morningstar on Disney's 3Q results:
| Quote: | | Walt Disney DIS reported strong fiscal third-quarter results that were a bit inflated by a few one-time items. We're maintaining our fair value estimate. Overall sales jumped 16% versus the year-ago quarter, highlighted by its media networks and filmed entertainment unit. The strong revenue growth boosted its overall operating profit margin to 23.4% from 19.3%. Higher media network revenue was fueled by cable network growth of 28%, with broadcasting only up 4%. The cable network results were a bit skewed by some one-time events that pulled some revenue forward by a quarter, but the growth was still impressive. We estimate that about half of the cable network growth was driven by accelerated revenue recognition (contractually driven by the number of live sports broadcasts) of affiliate fees at ESPN. Excluding the World Cup and two extra NBA finals games, ad revenue at ESPN was up 17%. Cable network expenses were only up 11%, which validates our view that last quarter's 14% expense increase was a just a near-term issue. Filmed entertainment sales improved 30% due to an easy comparison from the year-ago quarter, and the strong theatrical performances of Toy Story 3 and DVD sales of Alice in Wonderland. At Disney's parks and resorts, a 3% sales increase suggests that the business is gradually turning the corner. Disney appears to be sticking with its strategy of gradually weaning consumers off discounts as it recently announced price increases at its domestic parks. Per capita guest spending was 5% higher, and park attendance was down only 1% after accounting for the Easter holiday shift. Management indicated that domestic room reservations are pacing down only 1% on a comparable basis, which is encouraging given that this figure is an improvement over the outlooks put forth during each of the trailing three quarters. |
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HenryTo
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| Posted: Thu May 13, 2010 7:06 am Post subject: |
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Morningstar on Disney's 2Q results:
| Quote: | | Walt Disney's DIS second-quarter results support our view that the firm's studio entertainment and parks and resorts segments are poised for growth following a period of underperformance. We're sticking with our fair value estimate. Total sales improved 6%, fueled by cable revenue growth of 9% and studio entertainment growth of 7%. Our 4% sales growth forecast for fiscal 2010 matches the firm's growth over the first two quarters. Cable network sales were fueled by 13% affiliate fee growth at ESPN, which benefited from higher affiliate rates and the launch of a U.K. soccer channel, and mid-single-digit ad growth. We attribute a healthy portion of the 14% higher cable network expenses to new programming rights for U.K. soccer. We view this increase in costs as a near-term issue, as we don't expect ESPN to pursue international programming in a material way; Disney has repeatedly acknowledged that its strong competitive advantage in the United States does not translate overseas. Parks and resorts revenue increased 2% with several moving parts during the quarter. Disney's long-term strategy is to wean consumers from discounts, and this shift was evident, with per capita guest spending up 5% and park attendance down 4%. Management seems comfortable with this transition as it sees signs of higher demand, but we think Disney will stay flexible in maximizing revenue for its properties. If the economy continues to improve, we believe the parks business will benefit from pent-up demand. Studio entertainment growth of 7% was driven by the theatrical release of Alice in Wonderland, and we expect con tinued growth in this segment following a weak fiscal 2009. Disney's operating margin (excluding impairment and restructuring charges) improvement to 16.4% from 14.6% was driven mostly by the studio entertainment unit, which generated a $223 million profit after barely breaking even in the year-ago quarter. |
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rffrydr
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| Posted: Wed Feb 10, 2010 10:17 pm Post subject: |
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Don't worry, what Disney gives with one hand they take back with the other. Check out Silver Screen Partners..... 
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Atheles
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| Posted: Wed Feb 10, 2010 5:33 pm Post subject: |
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I own some Disney stock and yesterday, I got a letter. It stated bankruptcy and that I was an unsecured creditor. Now, I realize Disney's probably going to loose their 11 million they loads those cable companies.
Now, I'm wondering, which corporate officer thought it was a good idea to lend an unsecured loan?
I want to go to a proxy meeting and ask that very same question. Then I want them to make a total fool out of me by proving me wrong and having more wisdom than I. I want to know my investments are in good hands and the bankruptcy and our loss was unavoidable. |
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HenryTo
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| Posted: Wed Feb 10, 2010 10:23 am Post subject: |
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Morningstar's latest analyst notes for DIS:
| Quote: | | Disney's DIS first-quarter results confirm our thesis that its cable networks will offset near-term weakness at its more economically sensitive businesses. We're sticking with our fair value estimate. Overall sales improved 1%, and the cable networks were again the bright spot as revenue increased 8%, fueled by affiliate fee growth at ESPN and Disney Channel as well as 5% ad growth at ESPN. Parks and resorts sales were flat, and evidence of tight consumer budgets can be seen in the volume and pricing mix; 4% higher attendance at its Florida parks was offset by 4% lower guest spending. Disney continues to offer discounts and promotions to keep attendance from falling, and management's comments lead us to believe this will continue for at least a few more quarters. We view parks and resorts as a late-cycle business so we think sales will remain sluggish in the near term. However, we think its unique branded properties remain as popular as ever, and we're confident that Disney will eventually wean consumers from promotions. |
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rffrydr
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| Posted: Tue Apr 14, 2009 8:00 am Post subject: |
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Disney's new "camp for boys":
| Quote: | | LOS ANGELES — Kelly Peña, or “the kid whisperer,” as some Hollywood producers call her, was digging through a 12-year-old boy’s dresser drawer here on a recent afternoon. Her undercover mission: to unearth what makes him tick and use the findings to help the Walt Disney Company reassert itself as a cultural force among boys. |
http://www.nytimes.com/2009/04/14/arts/television/14boys.html?_r=1&ref=business
Who knows your children better?
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